Problem:
Martin Industries just paid an annual dividend of $1.90 a share. The market price of the stock is $28.60 and the growth rate is 6.6 percent.
Required:
Question: What is the firm's cost of equity?
- 25.99 percent
- 14.58 percent
- 7.20 percent
- 13.68 percent
- 12.83 percent
Note: Provide support for your underlying principle.